Legal issues
False Claims Act settlement (2012)
In December 2012, Education Holdings, Inc.—which operated The Princeton Review from 2002 to 2012—settled a lawsuit brought by the U.S. government under the False Claims Act. The lawsuit alleged that the company submitted false claims for federally funded tutoring services provided to students in underperforming New York City public schools through the Supplemental Educational Services (SES) program. Education Holdings admitted that its employees had falsified attendance records between 2006 and 2010 in order to receive payments for services that were not actually provided.
According to the U.S. Department of Justice, Site Managers frequently forged student signatures, and were pressured by supervisors to meet attendance quotas. Directors received bonuses based on inflated attendance rates, creating systemic incentives for fraud. The government joined a whistleblower lawsuit previously filed under the False Claims Act and ultimately reached a settlement requiring Education Holdings to pay up to $10 million in damages and penalties. Education Holdings also voluntarily agreed to a three-year exclusion from all federal education funding programs. At the time of the settlement, the company had already sold The Princeton Review brand and name to an unrelated third party in May 2012.
Criminal and civil proceedings (2013)
Following the 2012 settlement, the U.S. Attorney’s Office for the Southern District of New York announced a number of civil and criminal actions against individuals involved in the fraudulent SES reimbursement scheme. Ana Azocar and Zorayma Azocar, former Site Managers and later Directors of The Princeton Review’s SES program in New York City, pled guilty to fraud charges and settled civil claims brought against them. Zorayma Azocar entered her plea on January 11, 2013, and Ana Azocar on January 15, 2013. Robert Stephen Green, a former Director and Vice President of The Princeton Review, also settled civil claims related to the same scheme.
Student data breach lawsuit
The Princeton Review was also involved in a class action lawsuit after the personal data—including Social Security numbers—of students was inadvertently made publicly accessible on its website. The law firm Shapiro Haber & Urmy LLP represented a class of affected students and alleged claims of negligence, breach of contract, and unfair trade practices. A settlement was reached in which the company agreed to provide identity protection services, including credit monitoring and identity theft insurance, for up to three years.
Criticisms
Criticism of school rankings
College rankings, including those published by the Princeton Review, have been criticized for failing to be accurate or comprehensive by assigning objective rankings formed from subjective opinions. Princeton Review officials counter that their rankings are unique in that they rely on student opinion and not just on statistical data.
In 2002 an American Medical Association affiliated program, A Matter of Degree, funded by the Robert Wood Johnson Foundation, criticized the Princeton Review list of Best Party Schools. USA Today published an editorial titled "Sobering Statistics" in August 2002 and stated, "the doctor's group goes too far in suggesting that the rankings contribute to the problem (of campus drinking)." The editorial noted the fact that among the schools the AMA program was then funding as part of its campaign against campus drinking, six of 10 of those schools calling for The Princeton Review to "drop the annual ranking...had made (Princeton Review's) past top-party-school lists: many times for some. That's no coincidence." The editorial commended The Princeton Review for reporting the list, calling it "a public service" for "student applicants and their parents".
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The Princeton Review rankings for LGBT-related lists were criticized in 2010 by a ranking competitor in The Advocate magazine as inaccurate due to outdated methodologies. The Princeton Review has always based its "LGBTQ-Friendly" and "LGBTQ-Unfriendly" top twenty ranking lists on its tri-annual surveys of students at colleges profiled in the company's Best Colleges book which asks undergraduates: "Do students, faculty, and administrators at your college treat all persons equally regardless of their sexual orientations and gender identify/expression?" The Princeton Review also publishes The Gay & Lesbian Guide to College Life (2007). It has been available as an eBook since 2011.
Privacy concerns
In 2016, the company was criticized by privacy rights advocates concerned that a company that owns online dating and college preparation services could amass data and exploit it in a way that preys on unsuspecting consumers, particularly younger people. "Do parents know that when their underage kids enroll for exam prep or tutoring, personal information may be shared with hookup sites that could then target their kids to become customers?" asked the critic, who concluded that the company "makes no guarantee that data sharing among its entities will not include those customers whose sole aim is to improve their grades and test scores." Indeed, another critic points out that The Princeton Review "policy states 'we may collect certain information from your computer each time you visit our site'—information like data 'regarding your academic and extracurricular activities and interests.' That information can be used to 'send you email notices and offers; perform research and analysis about your use of or interest in our products, services or products or services offered by others; [and] develop and display content and advertising tailored to your interests on our site and other sites.'"
No evidence was ever presented that IAC, which owned The Princeton Review when these criticisms were made, used data gathered by The Princeton Review to promote IAC company dating services to younger people.
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